When you invest via an advisory firm or a brokerage firm such as Credit Suisse, UBS Financial Services, Morgan Stanley, or Merill Lynch, there is no shortage of any investment option available to you. If you look for advice from your advisor or broker, he may give you a list of investment strategies that have very less similarity to the bonds and stocks that individual investors are acquainted with. One kind of investment strategy that is rising in popularity among very large investment firms is YES or “yield enhancement Strategy”.
This UBS yield enhancement strategy is a kind of investing where brokers sell put or call options for increasing their returns in flat or stable markets. The YES strategy is pitched often as a stable or a safe option for those investors who are looking for constant returns. However, the reality is that the investment products that are purchased and sold under YES are highly complicated and have high risk. Unexpected market turbulences result in huge losses. Many UBS investors are contacting the investor lawyers to investigate the YES program to find out the areas of concern that have resulted in massive losses.
The risks of YES strategy
Yield enhancement strategy is risky as it relies on constant stability in a marketplace. This is almost non-existent in the long-term. The objective of this strategy is earning profits while a stock index, commonly the S&P 500 stays within a range established by the option prices bought at the end of the price range. When an option expires without attaining the strike price, then an investor earns a profit from option premiums. This investment strategy includes the purchase of several naked or uncovered options.
UBS Yes investment case
UBS Yield Enhancement strategy seeks to enhance the investors’ returns who invested a certain amount. UBS Yes investors are suffering substantial losses. UBS Yes investors have expressed concerns regarding the trading strategy and the portfolio direction. In the recent case filed by lawyers on behalf of the YES investors, the lawyers are looking for compensation for the losses suffered by the investors related to risk disclosures and trading strategy involving the YES program among many other things. The claim focuses on several vital issues such as whether the YES Enhancement Strategy has adequately and completely disclosed the important risks to the investors and whether the trading strategy was in accordance with the advertised strategy.
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